GREENBRIER COMPANIES INC
For the period ended Feb 29, 2024. Filed Apr 5, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Feb 29, 2024 · Filed Apr 5, 2024
GBX$41.51-3.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2023-11-30; filed 2024-01-05.
0000950170-24-002449
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-02-29; filed 2024-04-05.
0000950170-24-042261
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 104 previous paragraphs and 158 current paragraphs.
52 unchanged; 38 reworded; 54 added; 13 removed; 1 previous and 14 current paragraphs rearranged.
Tables are not compared: 11 previous and 19 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (54)
Current report
Margin has improved $57.2 million and 30.7% compared to the same period last year driven by operating efficiencies and favorable product mix in our Manufacturing segment. All segments saw improvement in their margins when compared to the six months ended February 28, 2023.
Current report
$3.5 million decrease in Net earnings attributable to noncontrolling interest due to lower profitability for the three months ended February 29, 2024.
Current report
$2.6 million decrease in Income tax expense from lower pre-tax earnings for the three months ended February 29, 2024.
Current report
$4.7 million decrease in Net gain on disposition of equipment from lower sales of assets from our lease fleet during the three months ended February 29, 2024.
Current report
$4.6 million increase in Selling and administrative expense primarily attributed to an increase in employee related costs for the three months ended February 29, 2024.
Current report
Manufacturing Revenue decreased $232.8 million or 24.0% for the three months ended February 29, 2024 compared to the three months ended February 28, 2023. The decrease in Revenue was primarily attributed to a 26.4% decrease in railcar deliveries including lower syndications during the three months ended February 29, 2024.
Current report
Manufacturing Cost of revenue decreased $245.0 million or 27.2% for the three months ended February 29, 2024 compared to the three months ended February 28, 2023. The decrease in Cost of revenue was primarily attributed to a 26.4% decrease in railcar deliveries including lower syndications during the three months ended February 29, 2024.
Current report
Manufacturing Operating profit increased $12.2 million for the three months ended February 29, 2024 compared to the three months ended February 28, 2023. The increase in operating profit was primarily attributed to improved Margin of $12.2 million during the three months ended February 29, 2024.
Current report
Maintenance Services Revenue decreased $22.8 million or 23.3% for the three months ended February 29, 2024 compared to the three months ended February 28, 2023. The decrease was primarily attributed to 22.0% lower volumes in our wheels business due to mild winter weather during the three months ended February 29, 2024.
Current report
Maintenance Services Cost of revenue decreased $20.4 million or 22.8% for the three months ended February 29, 2024 compared to the three months ended February 28, 2023. The decrease was primarily due to operating at lower volumes during the three months ended February 29, 2024.
Current report
Maintenance Services Margin as a percentage of revenue decreased 0.6% for the three months ended February 29, 2024 compared to the three months ended February 28, 2023. The decrease in margin percentage was primarily attributed to lower operating efficiencies as a result of operating at lower volumes during the three months ended February 29, 2024.
Current report
Maintenance Services Operating profit decreased $2.2 million for the three months ended February 29, 2024 compared to the three months ended February 28, 2023. The decrease in operating profit was primarily attributed to lower operating efficiencies as a result of operating at lower volumes during the three months ended February 29, 2024.
Current report
Leasing & Management Services Revenue decreased $3.7 million or 6.7% for the three months ended February 29, 2024 compared to the three months ended February 28, 2023. The decrease was primarily attributed to lower syndication activity. This was partially offset by an increase of $4.0 million in rents associated with a larger fleet during the three months ended February 29, 2024.
Current report
Leasing & Management Services Margin as a percentage of revenue decreased 3.2% for the three months ended February 29, 2024 compared to the three months ended February 28, 2023. The decrease in margin percentage was primarily attributed to the lower syndication activity during the three months ended February 29, 2024.
Current report
Leasing & Management Services Operating profit decreased $7.5 million for the three months ended February 29, 2024 compared to the three months ended February 28, 2023. The decrease was primarily attributed to lower syndication activity and $2.9 million lower Net gain on disposition of equipment during the three months ended February 29, 2024.
Current report
Net Gain on Disposition of Equipment
Current report
Net gain on disposition of equipment was $4.9 million for the three months ended February 29, 2024 compared to $9.6 million for the prior comparable period. The decrease in Net gain on disposition of equipment was primarily attributed to fewer sales of assets from our lease fleet during the three months ended February 29, 2024.
Current report
For the three months ended February 28, 2023, we had Income tax expense of $11.9 million on a pre-tax income of $45.8 million for an effective tax rate of 25.9%. Tax expense included net favorable discrete items in our foreign operations.
Current report
Earnings from unconsolidated affiliates were $4.0 million and $2.9 million for the three months ended February 29, 2024 and February 28, 2023, respectively. The increase was primarily related to $2.2 million in higher earnings at our Brazil operations for the three months ended February 29, 2024.
Current report
Six Months Ended February 29, 2024 Compared to the Six Months Ended February 28, 2023
Current report
Overview
Current report
Consolidated Results
Current report
The 11.5% decrease in Revenue for the six months ended February 29, 2024 as compared to the six months ended February 28, 2023 was primarily due to a 12.6% decrease in Manufacturing Revenue. The decrease in Manufacturing Revenue was primarily attributed to a 10.3% decrease in railcar deliveries during the six months ended February 29, 2024.
Current report
The 16.1% decrease in Cost of revenue for the six months ended February 29, 2024 as compared to the six months ended February 28, 2023 was primarily due to a 16.5% decrease in Manufacturing Cost of revenue. The decrease in Manufacturing Cost of revenue was primarily attributed to a 10.3% decrease in railcar deliveries during the six months ended February 29, 2024.
Current report
Margin as a percentage of revenue was 14.6% and 9.9% for the six months ended February 29, 2024 and February 28, 2023, respectively. Margin as a percentage of revenue was positively impacted by an increase in Manufacturing Margin from 6.8% to 11.0% primarily attributed to operating efficiencies and favorable product mix during the six months ended February 29, 2024.
Current report
The $48.2 million increase in Net earnings attributable to Greenbrier for the six months ended February 29, 2024 as compared to the six months ended February 28, 2023 was primarily due to the following:
Current report
$57.2 million increase in Margin for the six months ended February 29, 2024 primarily due to operating efficiencies and a favorable product mix.
Current report
$24.2 million impairment of long-lived assets at our Gunderson facility for the six months ended February 28, 2023.
Current report
$8.1 million decrease in Net gain on disposition of equipment from lower sales of assets from our lease fleet for the six months ended February 29, 2024.
Current report
$7.5 million increase in Selling and administrative expense primarily attributed to an increase in employee related costs for the six months ended February 29, 2024.
Current report
$6.6 million increase in Interest and foreign exchange primarily attributed to an increase in interest expense from higher borrowing and interest rates for the six months ended February 29, 2024.
Current report
Manufacturing Segment
Current report
Manufacturing Revenue decreased $203.4 million or 12.6% for the six months ended February 29, 2024 compared to the six months ended February 28, 2023. The decrease in Revenue was primarily attributed to a 10.3% decrease in railcar deliveries during the six months ended February 29, 2024.
Current report
Manufacturing Cost of revenue decreased $248.6 million or 16.5% for the six months ended February 29, 2024 compared to the six months ended February 28, 2023. The decrease in Cost of revenue was primarily attributed to a 10.3% decrease in the volume of railcar deliveries and operating efficiencies during the six months ended February 29, 2024.
Current report
Manufacturing Margin as a percentage of revenue increased 4.2% for the six months ended February 29, 2024 compared to the six months ended February 28, 2023. The increase in margin percentage for the six months ended February 29, 2024 was primarily attributed to operating efficiencies and favorable product mix during the six months ended February 29, 2024.
Current report
Maintenance Services Segment
Current report
Maintenance Services Revenue decreased $24.5 million or 13.4% for the six months ended February 29, 2024 compared to the six months ended February 28, 2023. The decrease was primarily attributed to 19.3% lower volumes in our wheels business due to mild winter weather despite higher average selling prices during the six months ended February 29, 2024.
Current report
Maintenance Services Cost of revenue decreased $28.4 million or 16.8% for the six months ended February 29, 2024 compared to the six months ended February 28, 2023. The decrease was primarily due to operating at lower volumes during the six months ended February 29, 2024.
Current report
Maintenance Services Margin as a percentage of revenue increased 3.6% for the six months ended February 29, 2024 compared to the six months ended February 28, 2023. The increase in margin percentage was primarily attributed to favorable pricing during the six months ended February 29, 2024.
Current report
Maintenance Services Operating profit increased $2.9 million for the six months ended February 29, 2024 compared to the six months ended February 28, 2023. The increase in Operating profit was primarily attributed to favorable pricing during the six months ended February 29, 2024.
Showing the first 40 of 54 passages. Open the source sections for the rest.
Removed paragraphs (13)
Previous report
Revenue increased by $42.3 million and 5.5% compared to the same period last year driven by a 15.6% increase in railcar deliveries.
Previous report
Margin has improved $51.8 million and 74.5% compared to the same period last year driven by a 15.6% increase in railcar deliveries, improved operating efficiencies across the business and favorable product mix.
Previous report
Manufacturing revenue increased $29.4 million or 4.5% for the three months ended November 30, 2023 compared to the three months ended November 30, 2022. The increase in revenue was primarily attributed to a 15.6% increase in railcar deliveries and higher syndications partially offset by a lower average selling price due to a change in product mix when compared to the prior comparable period.
Previous report
Manufacturing cost of revenue decreased $3.6 million or 0.6% for the three months ended November 30, 2023 compared to the three months ended November 30, 2022. The decrease in cost of revenue was primarily attributed to operating efficiencies and a change in product mix during the three months ended November 30, 2023.
Previous report
Maintenance Services revenue decreased $1.7 million or 2.0% for the three months ended November 30, 2023 compared to the three months ended November 30, 2022. The decrease was primarily attributed to lower volumes with higher average selling price.
Previous report
Maintenance Services cost of revenue decreased $8.0 million or 10.1% for the three months ended November 30, 2023 compared to the three months ended November 30, 2022. The decrease was primarily due to operating efficiencies.
Previous report
Maintenance Services margin as a percentage of revenue increased 7.7% for the three months ended November 30, 2023 compared to the three months ended November 30, 2022. The increase in margin percentage was primarily attributed to improved pricing and operating efficiencies.
Previous report
Maintenance Services operating profit increased $5.1 million for the three months ended November 30, 2023 compared to the three months ended November 30, 2022. The increase in operating profit was primarily attributed to improved pricing and operating efficiencies.
Previous report
Leasing & Management Services margin as a percentage of revenue increased 6.9% for the three months ended November 30, 2023 compared to the three months ended November 30, 2022. The increase in margin percentage was primarily attributed to higher syndication activity and lease rents.
Previous report
Leasing & Management Services operating profit increased $10.7 million for the three months ended November 30, 2023 compared to the three months ended November 30, 2022. The increase was primarily attributed to higher syndication activity and improved Margin in the lease fleet for the three months ended November 30, 2023.
Previous report
Net Loss (Gain) on Disposition of Equipment
Previous report
For the three months ended November 30, 2022, we had income tax benefit of $3.8 million on a pre-tax loss of $24.4 million. The tax benefit was attributed to a net favorable discrete impact related to the impairment of long-lived assets at our Gunderson facility, partially offset by changes in foreign currency exchange rates and inflationary adjustments at our U.S. Dollar denominated foreign operations.
Previous report
The change in cash used in operating activities for the three months ended November 30, 2023 compared to the three months ended November 30, 2022 was primarily due to a change in Leased railcars for syndication and an increase in Net earnings.
Reworded paragraphs (38)
Previous wording
We operate in three reportable segments: Manufacturing; Maintenance Services; and Leasing & Management Services. Our segments are operationally integrated. The Manufacturing segment, which currently operates from facilities in the U.S., Mexico, Poland, and Romania, produces freight railcars, tank cars, intermodal railcars and automotive railcar products. The Maintenance Services segment performs wheel and axle servicing, railcar maintenance and produces a variety of parts for the rail industry in North America. The Leasing & Management Services segment owns approximately 14,100 railcars as of November 30, 2023. We also provide management services for railroads, shippers, carriers, institutional investors and other leasing and transportation companies in North America. Through unconsolidated affiliates we produce rail and industrial components and have an ownership stake in a railcar manufacturer in Brazil.
Current wording
We operate in three reportable segments: Manufacturing; Maintenance Services; and Leasing & Management Services. Our segments are operationally integrated. The Manufacturing segment, which currently operates from facilities in the U.S., Mexico, Poland, and Romania, produces freight railcars, tank cars, intermodal railcars and automotive railcar products. The Maintenance Services segment performs wheel and axle servicing, railcar maintenance and produces a variety of parts for the rail industry in North America. The Leasing & Management Services segment owns approximately 14,600 railcars as of February 29, 2024. We also provide management services for railroads, shippers, carriers, institutional investors and other leasing and transportation companies in North America.
Previous wording
Management identifies the following trends which continue to impact our business and our results for the three months ended November 30, 2023. Overall, demand in the marketplace remains strong for our products and services. Supply chain challenges, rail service congestion, inflation, high interest rates, and labor shortages continue to impact our business. Despite the continued challenging operating environment, we accomplished the following during the quarter ended November 30, 2023:
Current wording
Management identifies the following trends which continue to impact our business and our results for the six months ended February 29, 2024. Overall, demand in the marketplace remains strong for our products and services. Supply chain challenges, rail service congestion, inflation, high interest rates, and labor shortages continue to impact our business. Despite this operating environment, we accomplished the following during the six months ended February 29, 2024:
Previous wording
Net earnings attributable to Greenbrier increased $47.9 million compared to the same period last year driven in part by operating efficiencies in connection with the optimization of our industrial footprint to support our strategic plan discussed below.
Current wording
Net earnings attributable to Greenbrier increased $48.2 million compared to the same period last year driven in part by operating efficiencies in connection with the ongoing optimization of our industrial footprint to support our strategic plan discussed below.
Previous wording
As we continue to execute on our strategic plan, we remain focused on increasing recurring revenue, expanding our aggregate gross margin, and raising our return on invested capital.
Current wording
We believe our results highlight our continued focus on our strategic plan and we remain focused on increasing recurring revenue, expanding our aggregate gross margin, and raising our return on invested capital. Recurring revenue is defined as Leasing & Management Services revenue excluding the impact of syndication transactions.
Previous wording
Our backlog remains strong with railcar deliveries into 2026. Our railcar backlog was 29,700 units with an estimated value of $3.8 billion as of November 30, 2023. Our backlog includes $880 million of railcars intended for syndication which are supported by lease agreements with external customers and may be syndicated to third parties or held in our lease fleet depending on a variety of factors. Multi-year supply agreements are a part of rail industry practice. A portion of the orders included in backlog reflects an assumed product mix. Under terms of the orders, the exact mix and pricing will be determined in the future, which may impact backlog. Approximately 3% of backlog units and estimated backlog value as of November 30, 2023 was associated with our Brazilian manufacturing operations which is accounted for under the equity method.
Current wording
Our backlog remains strong with railcar deliveries into 2026. Our railcar backlog was 29,200 units with an estimated value of $3.6 billion as of February 29, 2024. Our backlog includes nearly $815 million of railcars intended for syndication which are supported by lease agreements with external customers and may be syndicated to third parties or held in our lease fleet depending on a variety of factors. Approximately 3% of backlog units and 2% of estimated backlog value as of February 29, 2024 was associated with our Brazilian manufacturing operations which is accounted for under the equity method.
Previous wording
Revenue, Cost of revenue, Margin and Earnings (loss) from operations (operating profit or loss) presented below, include amounts from external parties and exclude intersegment activity that is eliminated in consolidation.
Current wording
Revenue, Cost of revenue, Margin and Earnings from operations (operating profit or loss) presented below, include amounts from external parties and exclude intersegment activity that is eliminated in consolidation.
Previous wording
The 5.5% increase in revenue for the three months ended November 30, 2023 as compared to the three months ended November 30, 2022 was primarily due to a 4.5% increase in Manufacturing revenue and 42.3% increase in Leasing and Management Services revenue. The increases were primarily driven by higher deliveries and syndication activity during the three months ended November 30, 2023 partially offset by a lower average selling price due to a change in product mix when compared to the prior comparable period.
Current wording
The 23.1% decrease in Revenue for the three months ended February 29, 2024 as compared to the three months ended February 28, 2023 was primarily due to a 24.0% decrease in Manufacturing revenue and 23.3% decrease in Maintenance Services revenue. The decreases were primarily driven by a 26.4% decrease in railcar deliveries including lower syndications and 22.0% lower volumes in our wheels business due to mild winter weather during the three months ended February 29, 2024.
Previous wording
The 1.4% decrease in cost of revenue for the three months ended November 30, 2023 as compared to the three months ended November 30, 2022 was primarily due to a 0.6% decrease in Manufacturing cost of revenue. The decrease in Manufacturing cost of revenue was primarily attributed to operating efficiencies and a change in product mix within our Manufacturing segment when compared to the prior comparable period.
Current wording
The 26.3% decrease in Cost of revenue for the three months ended February 29, 2024 as compared to the three months ended February 28, 2023 was primarily due to a 27.2% decrease in Manufacturing cost of revenue. The decrease in Manufacturing cost of revenue was primarily attributed to a 26.4% decrease in railcar deliveries including lower syndications during the three months ended February 29, 2024.
Previous wording
Margin as a percentage of revenue was 15.0% and 9.1% for the three months ended November 30, 2023 and 2022, respectively. The overall margin as a percentage of revenue was positively impacted by operating efficiencies and favorable product mix within our Manufacturing segment as well as improved pricing at our Maintenance Services segment.
Current wording
Margin as a percentage of revenue was 14.2% and 10.4% for the three months ended February 29, 2024 and February 28, 2023, respectively. Margin as a percentage of revenue was positively impacted by operating efficiencies and favorable product mix within our Manufacturing segment during the three months ended February 29, 2024.
Previous wording
The $47.9 million increase in Net earnings attributable to Greenbrier for the three months ended November 30, 2023 as compared to the three months ended November 30, 2022 was primarily due to:
Current wording
The $0.3 million increase in Net earnings attributable to Greenbrier for the three months ended February 29, 2024 as compared to the three months ended February 28, 2023 was primarily due to:
Previous wording
An increase in Margin for the three months ended November 30, 2023 primarily due to higher railcar deliveries, an increase in syndication revenue and operating efficiencies.
Current wording
$5.4 million increase in Margin for the three months ended February 29, 2024 primarily due to operating efficiencies and a favorable product mix.
Previous wording
Manufacturing margin as a percentage of revenue increased 4.6% for the three months ended November 30, 2023 compared to the three months ended November 30, 2022. The increase in margin percentage for the three months ended November 30, 2023 was primarily attributed to operating efficiencies and favorable product mix during the three months ended November 30, 2023.
Current wording
Manufacturing Margin as a percentage of revenue increased 3.8% for the three months ended February 29, 2024 compared to the three months ended February 28, 2023. The increase in margin percentage for the three months ended February 29, 2024 was primarily attributed to operating efficiencies and favorable product mix during the three months ended February 29, 2024.
Previous wording
Leasing & Management Services cost of revenue increased $2.1 million or 16.3% for the three months ended November 30, 2023 compared to the three months ended November 30, 2022. The increase was primarily due to higher costs from the larger fleet.
Current wording
Leasing & Management Services Cost of revenue increased $0.7 million or 4.9% for the three months ended February 29, 2024 compared to the three months ended February 28, 2023. The increase was primarily due to higher costs from the larger fleet during the three months ended February 29, 2024.
Previous wording
Selling and administrative expense was $56.3 million or 7.0% of revenue for the three months ended November 30, 2023 compared to $53.4 million or 7.0% of revenue for the prior comparable period. The $2.9 million increase was primarily attributed to an increase in employee related costs.
Current wording
Selling and administrative expense was $63.6 million or 7.4% of Revenue for the three months ended February 29, 2024 compared to $59.0 million or 5.3% of Revenue for the prior comparable period. The $4.6 million increase was primarily attributed to an increase in employee related costs for the three months ended February 29, 2024.
Previous wording
Net loss (gain) on disposition of equipment typically includes the sale of assets from our lease fleet (Equipment on operating leases, net) and disposition of property, plant and equipment. Assets are periodically sold in the normal course of business in order to optimize our fleet and to manage risk and liquidity.
Current wording
Net gain on disposition of equipment typically includes the sale of assets from our lease fleet (Equipment on operating leases, net) and disposition of property, plant and equipment. Assets are periodically sold in the normal course of business in order to optimize our fleet and to manage risk and liquidity.
Previous wording
The $3.6 million increase in Interest and foreign exchange expense for the three months ended November 30, 2023 compared to the three months ended November 30, 2022 was partially attributed to an increase in interest expense from higher interest rates and borrowings.
Current wording
The $3.0 million increase in Interest and foreign exchange expense for the three months ended February 29, 2024 compared to the three months ended February 28, 2023 was attributed to an increase in interest expense from higher interest rates and borrowings.
Previous wording
For the three months ended November 30, 2023, we had income tax expense of $10.0 million on pre-tax income of $41.7 million for an effective tax rate of 24.0%. The effective tax rate benefited from net favorable adjustments related to our foreign subsidiaries.
Current wording
For the three months ended February 29, 2024, we had Income tax expense of $9.3 million on pre-tax income of $38.9 million for an effective tax rate of 23.9%. The effective tax rate benefited from net favorable adjustments related to our foreign subsidiaries.
Previous wording
Net earnings (loss) attributable to noncontrolling interest was earnings of $2.0 million for the three months ended November 30, 2023 compared to a loss of $0.6 million for the three months ended November 30, 2022. Net earnings (loss) attributable to noncontrolling interest primarily represents our joint venture partner's share in the results of operations of our Mexican railcar manufacturing joint ventures, adjusted for intercompany sales, and our European partner’s share of the results of our European operations.
Current wording
Net earnings attributable to noncontrolling interest was $0.2 million for the three months ended February 29, 2024 compared to $3.7 million for the three months ended February 28, 2023. Net earnings attributable to noncontrolling interest primarily represents our joint venture partner's share in the results of operations of our Mexican railcar manufacturing joint ventures, adjusted for intercompany sales, and our European partner’s share of the results of our European operations.
Previous wording
These were partially offset by higher income tax expense associated with improved earnings during the three months ended November 30, 2023.
Current wording
$11.2 million increase in Income tax expense associated with higher pre-tax earnings during the six months ended February 29, 2024.
Previous wording
Manufacturing operating profit increased $57.7 million for the three months ended November 30, 2023 compared to the three months ended November 30, 2022. The increase in operating profit was primarily attributed to improved Margin during the three months ended November 30, 2023 as well as an impairment loss during the three months ended November 30, 2022.
Current wording
Manufacturing Operating profit increased $69.9 million for the six months ended February 29, 2024 compared to the six months ended February 28, 2023. The increase in Operating profit was primarily attributed to an increase in Margin during the six months ended February 29, 2024 as well as a $24.2 million impairment loss during the six months ended February 28, 2023.
Previous wording
Leasing & Management Services revenue increased $14.6 million or 42.3% for the three months ended November 30, 2023 compared to the three months ended November 30, 2022. The increase was primarily attributed to higher syndication activity and higher lease rents due to a larger fleet and improved lease rates.
Current wording
Leasing & Management Services Revenue increased $10.9 million or 12.1% for the six months ended February 29, 2024 compared to the six months ended February 28, 2023. The increase was primarily attributed to higher lease rents due to a larger fleet and improved lease rates during the six months ended February 29, 2024.
Previous wording
Net loss on disposition of equipment was $0.1 million for the three months ended November 30, 2023 compared to a gain of $3.3 million for the prior comparable period. The loss during the three months ended November 30, 2023 was primarily driven by a loss on a property lease termination.
Current wording
Net gain on disposition of equipment was $4.8 million for the six months ended February 29, 2024 compared to a gain of $12.9 million for the prior comparable period. The decrease in Net gain on disposition of equipment was primarily attributed to fewer sales of assets from our lease fleet during the six months ended February 29, 2024.
Previous wording
The three months ended November 30, 2022 included a $24.2 million impairment of long-lived assets at our Gunderson facility.
Current wording
The six months ended February 28, 2023 included a $24.2 million impairment of long-lived assets at our Gunderson facility.
Previous wording
Earnings from unconsolidated affiliates were $1.5 million and $3.3 million for the three months ended November 30, 2023 and 2022, respectively. The decrease was primarily related to lower volumes.
Current wording
Earnings from unconsolidated affiliates were $5.5 million and $6.2 million for the six months ended February 29, 2024 and February 28, 2023, respectively. The decrease was primarily related to a loss at a temporarily idle facility during the six months ended February 29, 2024.
Previous wording
We have been financed through cash generated from operations and borrowings. At November 30, 2023 Cash and cash equivalents and Restricted cash were $321.3 million, an increase of $18.6 million from $302.7 million at August 31, 2023.
Current wording
We have been financed through cash generated from operations and borrowings. At February 29, 2024 Cash and cash equivalents and Restricted cash were $272.0 million, an decrease of $30.7 million from $302.7 million at August 31, 2023.
Previous wording
Cash used in investing activities primarily related to capital expenditures net of proceeds from the sale of assets and investment activity with our unconsolidated affiliates. The change in cash used in investing activities for the three months ended November 30, 2023 compared to the three months ended November 30, 2022 was primarily attributable to fewer fleet sales and an increase in capital expenditures when compared to the three months ended November 30, 2022 in our Leasing & Management Services segment.
Current wording
Cash used in investing activities primarily related to capital expenditures net of proceeds from the sale of assets and investment activity with our unconsolidated affiliates. The $57.9 million increase in cash used in investing activities for the six months ended February 29, 2024 compared to the six months ended February 28, 2023 was primarily attributable to a $36.2 million decrease in proceeds from sales of assets when compared to the six months ended February 28, 2023. Proceeds from the sale of assets primarily relate to fleet sales in our Leasing & Management Services segment.
Previous wording
Capital expenditures primarily relate to additions to our lease fleet and on-going investments into the safety and productivity of our facilities. Proceeds from the sale of assets primarily relate to sales of railcars from our lease fleet within Leasing & Management Services. Assets from our lease fleet are periodically sold in the normal course of business to accommodate customer demand and to manage risk and liquidity. Proceeds from sales of assets are expected to be approximately $85 million for 2024.
Current wording
Capital expenditures primarily relate to additions to our lease fleet and on-going investments into the safety and productivity of our facilities. Proceeds from the sale of assets primarily relate to sales of railcars from our lease fleet within Leasing & Management Services. Assets from our lease fleet are periodically sold in the normal course of business to accommodate customer demand and to manage risk and liquidity. Proceeds from sales of assets are expected to be approximately $75 million for 2024.
Previous wording
Gross capital expenditures for 2024 are expected to be approximately $300 million for Leasing & Management Services, approximately $165 million for Manufacturing and approximately $15 million for Maintenance Services. Capital expenditures for 2024 primarily relate to additions to our lease fleet reflecting our leasing strategy and continued investments into the safety and productivity of our facilities.
Current wording
Gross capital expenditures for 2024 are expected to be approximately $280 million for Leasing & Management Services, approximately $140 million for Manufacturing and approximately $15 million for Maintenance Services. Capital expenditures for 2024 primarily relate to additions to our lease fleet reflecting our leasing strategy and continued investments into the safety and productivity of our facilities.
Previous wording
The change in cash provided by financing activities for the three months ended November 30, 2023 compared to the three months ended November 30, 2022 was primarily attributed to higher proceeds from the issuance of notes payable, net of repayments and the net change in revolving notes to support our operations. During the three months ended November 30, 2023 we issued $178.5 million of asset backed securities and used proceeds to pay down $139.9 million of our GBX Leasing warehouse facility. We also drew $65.1 million on the GBX Leasing warehouse facility to grow the fleet.
Current wording
The $56.0 million increase in cash flow from financing activities for the six months ended February 29, 2024 compared to the six months ended February 28, 2023 was primarily attributed to $53.6 million higher proceeds from the issuance of notes payable, net of repayments. During the six months ended February 29, 2024 we issued $178.5 million of asset backed securities and used proceeds to pay down $139.9 million of our GBX Leasing warehouse facility. We also drew $89.2 million on the GBX Leasing warehouse facility to grow the fleet. In February 2024, we paid $47.7 million to retire our 2024 Convertible Notes.
Previous wording
During the three months ended November 30, 2023, we purchased a total of 38 thousand shares for $1.3 million. As of November 30, 2023, the amount remaining for repurchase under the share repurchase program was $45.1 million.
Current wording
During the six months ended February 29, 2024, we purchased a total of 38 thousand shares for $1.3 million. As of February 29, 2024, the amount remaining for repurchase under the share repurchase program was $45.1 million. During the six months ended February 28, 2023, we purchased a total of 575 thousand shares for $17.4 million.
Previous wording
As of November 30, 2023, we had $307.3 million in Cash and cash equivalents and $355.2 million in available borrowings. The available balance to draw under committed credit facilities includes $280.8 million on the North American credit facility, $19.4 million on the European credit facilities and $55.0 million on the Mexican credit facilities.
Current wording
As of February 29, 2024, we had $252.0 million in Cash and cash equivalents and $329.3 million in available borrowings. The available balance to draw under committed credit facilities includes $214.6 million on the North American credit facility, $43.7 million on the European credit facilities and $71.0 million on the Mexican credit facilities.
Previous wording
North America – As of November 30, 2023, a $600.0 million revolving line of credit, maturing August 2026, secured by substantially all our U.S. assets not otherwise pledged as security for term loans or the warehouse credit facility, existed to provide working capital and interim financing of equipment, principally for our U.S. and Mexican operations. Advances under this North American credit facility bear interest at SOFR plus 1.50% plus 0.10% as a SOFR adjustment or Prime plus 0.50% depending on the type of borrowing. Available borrowings under the credit facility are generally based on defined levels of eligible inventory, receivables, property, plant and equipment and leased equipment, as well as total debt to consolidated capitalization and fixed charges coverage ratios.
Current wording
North America – As of February 29, 2024, a $600.0 million revolving line of credit, maturing August 2026, secured by substantially all our U.S. assets not otherwise pledged as security for term loans or the warehouse credit facility, existed to provide working capital and interim financing of equipment, principally for our U.S. and Mexican operations. Advances under this North American credit facility bear interest at SOFR plus 1.75% plus 0.10% as a SOFR adjustment or Prime plus 0.75% depending on the type of borrowing. Available borrowings under the credit facility are generally based on defined levels of eligible inventory, receivables, property, plant and equipment and leased equipment, as well as total debt to consolidated capitalization and fixed charges coverage ratios.
Previous wording
Europe – As of November 30, 2023, lines of credit totaling $63.7 million secured by certain of our European assets, with variable rates that range from WIBOR plus 1.2% to WIBOR plus 1.6% and EURIBOR plus 1.9%, were available for working capital needs of our European manufacturing operations. The European lines of credit include $21.9 million which is guaranteed by us. European credit facilities are regularly renewed. Currently, these European credit facilities have maturities that range from June 2024 through November 2025.
Current wording
Europe – As of February 29, 2024, lines of credit totaling $75.3 million secured by certain of our European assets, with variable rates that range from WIBOR plus 1.2% to WIBOR plus 1.6% and EURIBOR plus 1.9%, were available for working capital needs of our European manufacturing operations. The European lines of credit include $32.5 million which is guaranteed by us. European credit facilities are regularly renewed. Currently, these European credit facilities have maturities that range from June 2024 through November 2025.
Previous wording
Mexico – As of November 30, 2023, our Mexican railcar manufacturing operations had lines of credit totaling $185.0 million for working capital needs, $85.0 of which we and our joint venture partner have each guaranteed 50%. Advances under these facilities bear interest at variable rates that range from SOFR plus 2.55% to SOFR plus 4.25%. The Mexican credit facilities have maturities that range from June 2024 through October 2026.
Current wording
Mexico – As of February 29, 2024, our Mexican railcar manufacturing operations had lines of credit totaling $196.0 million for working capital needs, $96.0 of which we and our joint venture partner have each guaranteed 50%. Advances under these facilities bear interest at variable rates that range from SOFR plus 2.22% to SOFR plus 4.25%. The Mexican credit facilities have maturities that range from June 2024 through January 2027.
Previous wording
Outstanding commitments under the North American credit facility included letters of credit which totaled $6.4 million and $4.9 million as of November 30, 2023 and August 31, 2023, respectively.
Current wording
Outstanding commitments under the North American credit facility included letters of credit which totaled $7.1 million and $4.9 million as of February 29, 2024 and August 31, 2023, respectively.
Previous wording
To mitigate the exposure to changes in interest rates, we have managed a portion of our variable rate debt with interest rate swap agreements, effectively converting $590.5 million of variable rate debt to fixed rate debt as of November 30, 2023.
Current wording
To mitigate the exposure to changes in interest rates, we have managed a portion of our variable rate debt with interest rate swap agreements, effectively converting $608.6 million of variable rate debt to fixed rate debt as of February 29, 2024.
Previous wording
We performed a quantitative assessment for our annual goodwill impairment test during the third quarter of 2023. Based on the results of our assessment, the estimated fair values of all reporting units with goodwill increased from our prior quantitative assessment, and exceeded their carrying values; therefore, we concluded that goodwill was not impaired. Pursuant to the authoritative guidance, we make certain estimates and assumptions to determine our reporting units and whether the fair value for each reporting unit is greater than its carry value. The above highlighted judgments contemplated estimates and effects of macroeconomic trends that are inherently uncertain. Changes in these estimates, which may include the effects of inflation and policy reactions thereto, increases in pricing of materials and components, changes in demand, or potential macroeconomic events may cause future assessment conclusions to differ.
Current wording
We performed a quantitative assessment for our annual goodwill impairment test during the third quarter of 2023. Based on the results of our assessment, the estimated fair values of all reporting units with goodwill increased from our prior quantitative assessment, and exceeded their carrying values; therefore, we concluded that goodwill was not impaired. Pursuant to the authoritative guidance, we make certain estimates and assumptions to determine our reporting units and whether the fair value for each reporting unit is greater than its carrying value. The above highlighted judgments contemplated estimates and effects of macroeconomic trends that are inherently uncertain. Changes in these estimates, which may include the effects of inflation and policy reactions thereto, increases in pricing of materials and components, changes in demand, or potential macroeconomic events may cause future assessment conclusions to differ.
Previous wording
As of November 30, 2023, our goodwill balance was $128.6 million of which $85.6 million related to our Manufacturing segment and $43.0 million related to our Maintenance Services segment. Our Manufacturing segment includes the North America Manufacturing reporting unit with a goodwill balance of $56.3 million; and the Europe Manufacturing reporting unit with a goodwill balance of $29.3 million.
Current wording
As of February 29, 2024, our goodwill balance was $128.0 million, of which $85.4 million related to our Manufacturing segment and $42.6 million related to our Maintenance Services segment. Our Manufacturing segment includes the North America Manufacturing reporting unit with a goodwill balance of $56.3 million and the Europe Manufacturing reporting unit with a goodwill balance of $29.1 million.
Rearranged current paragraphs (14)
Current report — wording carried from elsewhere
These were partially offset by the following:
Current report — wording carried from elsewhere
Revenue, Cost of revenue, Margin and Earnings from operations (operating profit or loss) presented below, include amounts from external parties and exclude intersegment activity that is eliminated in consolidation.
Current report — wording carried from elsewhere
Performance for our segments is evaluated based on operating profit or loss. Corporate includes selling and administrative costs not directly related to goods and services and certain costs that are intertwined among segments due to our integrated business model. Management does not allocate Interest and foreign exchange or Income tax expense for either external or internal reporting purposes.
Current report — wording carried from elsewhere
Through our integrated business model, we provide a broad range of custom products and services in each of our segments, which have various selling prices and margins. The demand for and mix of products and services delivered changes from period to period, which causes fluctuations in our results of operations.
Current report — wording carried from elsewhere
These were partially offset by the following:
Current report — wording carried from elsewhere
Our Manufacturing segment primarily generates revenue from manufacturing a wide range of freight railcars and from the conversion of existing or in-service railcars through our facilities in North America and Europe.
Current report — wording carried from elsewhere
Our Maintenance Services segment primarily generates revenue from railcar component manufacturing and servicing and from providing railcar maintenance services.
Current report — wording carried from elsewhere
Our Leasing & Management Services segment generates revenue from leasing railcars from our lease fleet, providing various management services, syndication revenue associated with leases attached to new railcar sales, and interim rent on leased railcars for syndication.
Current report — wording carried from elsewhere
Net gain on disposition of equipment typically includes the sale of assets from our lease fleet (Equipment on operating leases, net) and disposition of property, plant and equipment. Assets are periodically sold in the normal course of business in order to optimize our fleet and to manage risk and liquidity.
Current report — wording carried from elsewhere
Interest and foreign exchange expense was composed of the following:
Current report — wording carried from elsewhere
For the six months ended February 29, 2024, we had Income tax expense of $19.3 million on pre-tax income of $80.6 million for an effective tax rate of 23.9%. The effective tax rate benefited from net favorable adjustments related to our foreign subsidiaries.
Current report — wording carried from elsewhere
The provision for income taxes during interim quarterly reporting periods is based on our estimates of the effective tax rates for the full fiscal year and may be positively or negatively impacted by adjustments that are required to be reported in the quarter. The effective tax rate can fluctuate year-to-year due to changes in the mix of foreign and domestic pre-tax earnings. It can also fluctuate with changes in the proportion of pre-tax earnings attributable to our Mexican railcar manufacturing joint venture. The joint venture is treated as a partnership for tax purposes and, as a result, the partnership’s entire pre-tax earnings are included in earnings before income taxes and earnings from unconsolidated affiliates, whereas only our 50% share of the tax is included in Income tax expense.
Current report — wording carried from elsewhere
Through unconsolidated affiliates we produce rail and industrial components and have an ownership stake in a railcar manufacturer in Brazil. We record the results from these unconsolidated affiliates on an after-tax basis.
Current report — wording carried from elsewhere
Net earnings attributable to noncontrolling interest was $2.2 million for the six months ended February 29, 2024 compared to $3.1 million for the six months ended February 28, 2023. Net earnings attributable to noncontrolling interest primarily represents our joint venture partner's share in the results of operations of our Mexican railcar manufacturing joint ventures, adjusted for intercompany sales, and our European partner’s share of the results of our European operations.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
A $24.2 million impairment of long-lived assets at our Gunderson facility during the three months ended November 30, 2022.